By Sarah Hamaker
What if demographics didn€™t play so big a part in shopping behaviors as you thought? That€™s the intriguing question answered by a new study of American shoppers by Henkel Consumer Goods Inc.
"Conventional shopper marketing wisdom holds that consumers may be engaged and influenced at various moments along the path from brand awareness to purchase decision," said Mack Hoopes, shopper insights research manager for Henkel.
In its analysis, Henkel found that the various shopper-marketing tools used to engage and influence might work differently on different shopper segments. By analyzing more than 300 product categories in multiple channels €" grocery, mass merchandiser, supercenters, drug stores, club stores, dollar stores and convenience stores €" Henkel found that consumers could fit into three distinct groups based on shopping behavior.
"The most important thing€¦is the unique responses of each segment to promotional stimuli. The absolute behaviors of each group on spending and trip frequency are very different," said Hoopes.
According to Henkel, a series of discrete activities and trips to several retail outlets each week divide shoppers into three behavioral segments: shoptimizers, mainstreeters and carefrees.
Shoptimizers (planners) pre-plan shopping trips, use coupons and respond to everyday low pricing (EDLP) strategies. This group is also sensitive to in-store promotions. Shoptimizers spend around $7,200 annually, excluding clothing, electronics and hardware, and shop about four times weekly. They are large drug and supercenter shoppers, but they€™re not necessarily in the lower-income bracket.
Mainstreeters (reactives) usually do not pre-plan trips or use coupons, but they do respond somewhat to EDLP strategies. Mainstreeters also are highly sensitive to in-store promotions. This group shells out about $6,200 annually and visits stores around two-and-a-half times a week. This group represents the "Big Middle" €" the basic American shopper.
Carefrees (not planners) have no pre-planning, do not use coupons, have a low EDLP response and are insensitive to in-store promotions. This group spends about $5,500 annually and goes to stores just over twice a week. They represent the largest share of club-store spending.
"While the shoptimizers might have smaller baskets than average shoppers, they shop a lot," said Hoopes. "This segment is probably the most important shopper for us to capture because this group has been growing in size for three-and-a-half years."
By understanding these behavioral segments, retailers can determine what type of shopper they want and what marketing and merchandising strategies work best. For example, carefrees trust club stores and abdicate some of the planning effort to the store. It simplifies their lives €" a benefit that may be more important to this group than a broad assortment or a low register ring. On the other hand, shoptimizers may regard the EDLP positioning of a dollar store as a similar shortcut to value.
Retailers can use this information to play to certain segments and deï¬?ne their place in the market by taking into account the key behavioral tendencies of their core shoppers. Carefrees avoid supercenters, while mainstreeters heavily use that channel. Shoptimizers have a greater propensity to include drug stores in their portfolio of retail resources for fulfilling household needs.
"Evidently certain channels 'speak€™ better to certain behavioral groups than others. Retail managers who make merchandising and marketing decisions that play to this strength are likely to enjoy greater success," Hoopes said.
Evidently, the faltering economy has not affected shopper behaviors as expected. "Trips have been consolidating for some time with each shopper group," said Hoopes. "The recession showed one amazing fact in the first half of 2009 versus the first part of 2008: Shoptimizers were the only group so far to change their buying behavior by using more coupons, while mainstreeters and carefrees exhibited the same behaviors as before."
Surprisingly, the research discovered that "demographics had no predictability on these particular behaviors." These segments are equally distributed across income, household size and household age. "What that tells us is that these behaviors are enduring and foundational, and in fact, have been taught across multiple generations," said Hoopes.
One interesting fact that the data analysis brought forth is that shoptimizers purchase almost twice as much private-label products as does the carefree consumer, making shoptimizers the highest private-label consumer. Mainstreeters purchase store brands at about average levels.
Retailers can invoke this behavioral data alongside other consumer research. "For most retailers, it will be unrealistic to focus on all three behavioral groups. Retailers will need to formulate a strategic position for each that communicates what it stands for in the marketplace, and choose tactics that communicate value to the targeted behavioral groups," said Hoopes.
By taking these segments into account, retailers could experience a greater return on investment. "Our findings suggest some retailers may unwisely label highly motivated shoptimizers as less desirable because they take greater advantage of deals and coupons, when in fact, these shoppers index higher on total spending," said Hoopes.
Henkel€™s analysis provides opportunities for both retailers and brand marketers to reach more consumers more effectively. Hoopes puts it simply: "Each retailer must expect to communicate to shoptimizers differently than mainstreeters and care-frees so as to present its point of difference uniquely to each one."
For example, marketers aiming to influence carefree shoppers should probably abandon the notion of using a FSI (free standing insert) coupon to do so. And shoptimizers will not likely be influenced by end-aisle displays in club stores because of their pre-planning propensity.
"Retailers will need to ask themselves, 'What type of shopper do we want?€™ and then position their total service and product offering to match that objective," said Hoopes.
Sarah Hamaker is a freelance writer based in Fairfax, Virginia. She€™s also a NACS Magazine and NACS Daily contributing writer.